Other Stuff

After my eighth and likely final startup, E.piphany, sitting in a ski cabin, it became clear that there is a better a way to manage startups. Joseph Campbell’s insight of the repeatable patterns in mythology is equally applicable to building a successful startup. All startups (whether a new division inside a larger corporation or in the canonical garage) follow similar patterns—a series of steps which, when followed, can eliminate a lot of the early wandering in the dark. Looking back on startups that have thrived reflect this pattern again and again and again.

So what is it that makes some startups successful and leaves others selling off their furniture? Simply this: startups are not small versions of large companies. Yet the processes that early-stage companies were using were identical to that of large corporations. In hindsight it appeared clear that startups that survive the first few tough years do not follow the traditional product-centric launch model espoused by product managers or the venture capital community. Through trial and error, hiring and firing, successful startups all invented a parallel process to product development. In particular, the winners invent and live by a process of customer learning and discovery. It’s a process that doesn’t exist in large companies with existing customers and markets. But it is life and death for a new venture.

I call this process “Customer Development,” a sibling to “Product Development,” and each and every startup that succeeds recapitulates it, knowingly or not.

The “Customer Development” model is a paradox because it is followed by successful startups, yet articulated by no one. Its basic propositions are the antithesis of common wisdom yet they are followed by those who succeed.

[…] of telling these complex ideas in a very simple and fun language. His core idea is that there are patterns in successful startups. He writes – So what is it that makes some startups successful and leaves […]

Agreed….how does the entrepreneur who ptiches investors – whether angels or VCs – get the money needed in order to build the beta to test market with their customer? Yes, there are many questions to ask prospective customers on the front end and showing them, letting them interact with, your beta allows you to refine your product or service even further.

As you stated, the VCs only want to hear about product development and, I would add, revenue models.

I’m reading Roy Spence’s new book “It’s Not What You Sell….” and he recounts one of the most famous businessmen of our time, Sam Walton, who believed that you take care of the smallest detail for the customer and the revenues will follow.

Would you agree that your model, customer development, requires a lot more listening than talking? And, if so, then how favorable this model is not only for the customer but for the women entrepreneurs who typically tend to listen more easily than their male counterparts?

Steve, thanks for all the great insight. I am currently down in Brazil and no matter how much I search, I can’t seem to find your book down here. Is there any site that sells the ebook version? Thanks!

This is truly one of the best business (and design) books I’ve read in a while. And I can strongly relate to every step you mention in the book.

I recently had the chance to reflect on my first entrepreneurship experience, and I found that when I followed a similar path to the one you describe, creating a good product was almost effortless. Users were not just telling me their pain points or giving me feedback about my ideas, they were also designing the product with me! I cannot take much credit for that product: it was them who created most of it, because it was solving THEIR problems.

I hope companies will take more advantage of that abundant source of innovation (customers), instead of trying to create products behind their office walls.

[…] of seeing some major changes in how products are brought to market. If you follow the Lean Startup, Four Steps to the Epiphany, Customer Development movements then you have the core philosophy already. But what’s […]

Can you tell me if The Four Steps to Epiphany is available in Spanish? If not, are you interested about making the translation? I understand English very well and I´m a very good spanish writer… and I couldn´t find the book in Uruguay to buy it!!